CHAPTER 10 The Closing Process
The journey to homeownership is an exciting one, filled with moments of anticipation and planning. However, the closing process — the final step in securing your new home — is where everything comes together. It’s a complex process with many moving parts, but understanding what’s involved can make it smoother and less stressful. This chapter offers a friendly guide to navigating the closing process, including insurance, warranties, appraisals, and the final paperwork, so you can confidently take those last steps toward owning your new home.
Homeowner’s Insurance: Make Sure You’re Covered
Homeowner’s insurance is a must-have for most buyers, especially if you’re using a mortgage to finance your purchase. Lenders require proof of insurance to protect their investment in the property. As a buyer, you’ll need to secure a policy before closing. Homeowner’s insurance typically covers: • Fire, lightning, and smoke damage. • Damage caused by hail, windstorms, or falling objects. • Theft and vandalism. • Liability for accidents on your property. • Additional living expenses if your home becomes uninhabitable. Prepaying Insurance vs. Escrowing You’ll likely need to prepay one year of coverage before closing. This amount can be included in your closing costs or paid 54
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